Implementation of Supply Chain ManagementRachel Butler

Environmental Manager Finnforest UK

Who are we?

Finnish owned company,Metsaliitto, importing over 1.2 million cubic metres annually

Over 80% of volume is certified to either FSC or PEFC; the remainder are mainly in, certification or chain of custody process, meeting Controlled Wood Standard, TFT process

Don’t represent the end user; sell through DIY, Merchant & Construction customers

How Timber Policy works in practice

Introduction of a Procurement Policy five years ago was easy……

Implementation of policy more difficult!

Buyers are judged on their performance i.e. stock turn, quality and competitive prices.

In merchant/retail outlets buyers are mainly judged on commercial considerations & whether they meet budgets/cost reductions

Commercial realities of running a company can sometimes be in conflict with a Responsible Timber Policy.

However, competitive price does not necessarily always mean non-certified V certified.

FFUK Policy Actions & Self Policing

Risk assess all suppliers for products & rate More likely to get information from suppliers using one format hence

why FFUK signs up to the TTF’s Responsible Purchasing Policy

New suppliers from certified or low risk countries – documentation checked out, confirmation of sourcing areas is asked for.

Policy all new suppliers from risky countries have to be signed off Safeguards if this does not happen; SAP report every month notifies

of new suppliers!

Suppliers who become de-listed for environmental or quality reasons – vendor blocked on SAP - so no orders can be placed

Policy: Boycott v Engagement

Policy for Indonesia – suspended until the mill(s) committed either working towards legality & sustainability or gained it – now supplying FSC Hardwood Ply into the market place through Tjipta

Was this the right decision to suspend?

Brazil – FF have supported the State of Acre and now importing the first Hardwood Plywood from the region. The project is a visionary & been personally pioneered by Governor Jorge Viana.

Policy: Boycott v Engagement

China – stayed out due to environmental & social concerns. Commercially we lost business but are in discussions with some potential suppliers; no business unless commitment to improve is gained.

Generally engagement is preferred over boycott;

Need to engage to maintain some leverage over suppliers

Boycott can simply mean companies will sell to other markets or change land use.

Certain countries such as Burma, Liberia; boycott in view of international or national guidance.

Supply Chain Management

Timber trade is part of a supply chain & we know that the public is not generally interested.

UK Government as demand-led policy is increasing awareness for legal & sustainable timber – but more awareness needs to be done

All elements of supply chain need educating; recent WWF

report stated 65% of London Local Authorities do not assess their timber/paper purchases.

Estimated that anywhere between 20 – 40% timber is purchased by public sector, what does a typical LA consume – the need for a footprint?

The larger companies are pretty much aware of the issues & commercially have been hit by environmental campaigning! What can be done to educate the other players?

Supply Chain Management: Policing

Company self-policing, long term relationships with suppliers; lack of credibility?

Through external agencies such as TTF’s RPP & GFTN who offer company auditing to prove the claims made; therefore greater credibility

External auditing through civil society Environmental campaigns undoubtedly have an impact –

discrimination? Strengthening TTF’s Code of Conduct & make it easy for those outside

the trade to report issues If it works extend to other organisations in the supply chain e.g.

Builders Merchants & Retail

Legislation To level playing field & base the market on actual prices rather than

alleged illegal logging for some products How practical & feasible?

THANK YOU

rachel.butler@finnforest.com